tv Key Capitol Hill Hearings CSPAN May 27, 2014 10:00am-12:01pm EDT
put the toothpaste back in the tube. good luck with your book. guest: that is a strong point in the end. you can't reverse history. the palestinians have achieved a sense of april hood. -- peoplehood. you cannot reverse that. i was pointing out that it changed a lot since 1867. some of it was achieved by the late yasser arafat. byput the plo on the map carrying out tell of -- terrorism. it has been a weird 50 years. a time magazine graphic that was put together. this is from march of this year.
guest: the reason for that would domeeating the iron technology. the israelis are the test case, financing it.s criticizeans president obama for the surprise visit to the troops. he did notpset that meet with the outgoing resident. it is pretty obvious. president obama had no intention of going into the capital city. he was at the airbase and addressed the troops and had an important meeting in the -- with the u.s. ambassador.
he had no intention of seeing afghanistan's leader. he did notouse said want to interfere with the election taking place. that they don't care for him. he is the outgoing president. when he leaves, the white house will say good. otherwise we are not going to lock in any of the benefits. you can see where that would violate protocol and insult him. when a new president is installed, we need that follow-up. host: we have a democratic caller from texas. i have a question and a
comment. think alln is do you .f latin america host: we are wanting guest: there are so many parts of the world where the u.s. is involved and we don't talk about latin america and south america much in the news but the u.s. is really important there. africa, we're talking about a terrorism threat. europe, do they feel threatened by russia? these are big issues for the united states so don't forget foreign policy. host: appreciate the conversation. to bring you to the brookings institute, where they're talking about the russian gas matrix.
[captions copyright national cable satellite corp. 2014] [captioning performed by the national captioning institute] >> i am truly uninsured, the director of the security am -- i am-- i charles ebinger, director of the energy security initiative. it is a particular honor for me today to sponsor this event because there are very few people that professional you can say in the case of jonathan stern that we have known each other literally for close to 40 years. we first met each other when jonathan was working on soviet natural gas will stop --.
-- was working on soviet natural gas. outstandingost books on this issue that i've ever seen. without further ado, let me introduce jonathan and he will kick us off, and then we will have presentation from jim, open commentary but leaving a lot of time for questions from the audience. >> charlie, thank you very much. thank you all for coming. we appreciate the opportunity to launch the book here. in terms of protocol, as far as the oxford university press is concerned, the launches in london, so we are not really here but this happens to fit really well.
it is the first time we've presented the book in public this way. we come from a very small institute which is part of oxford university. the few people in a european university doing research on the deeply unfashionable subject of oil and gas. you can see the title of the book. i'm just showing you the structure because we are just going to give you pretty much a snapshot of a few issues, not all of these issues, although we are happy to talk about anything in the q&a. we are not in this presentation going to talk about the ukraine crisis but we would be happy to talk about it in the q&a as well. the thing that you should probably understand about the approach of the book is this is the first book on russian gas that we have published since the one that i wrote in 2005 on gazprom. wassubtext of that book with the russians be able to develop enough supply for all of
the markets they could possibly service, they could possibly deliver to? the subtext of this book is that that situation is completely changed. that is no longer the question. the question is can they deliver gas to rapidly changing markets where the market conditions and particularly the pricing conditions mean they're facing much more competition than was ?ver the case in the past echo the idea is just to give you an idea of the complexity of the situation they face. gazprom, but not just as prom, the russian government, places of every context mixture of supply sources and markets, which have to be managed on an ongoing basis as those markets are changing very rapidly. i am still listening to people
gazprom'slking about declining production and leisure betting that to some problems that gazprom may be having. jim will address that a little later on. i'm still listening to people who keep saying things like what are they doing in europe, is this due to political or commercial issues? these are the kinds of complexities we have addressed in the book and will be addressing a little bit in this presentation. you in termsocate of the importance of gas in the macroeconomic picture. people and particularly journalists tend to talk about oil and gas in the russian that thenot realizing 2 are completely not comparable. this just shows you -- maybe in the back and is little -- maybe
in the back it is a little difficult, the sheriff of values added to gdp were gas is 10%, the share in exports, where gas is about 12.5% compared with oil at 54%, and the share of budget revenues where oil is 42% and gas is 6.3%. the key thing remembers that gas is very important in the russian energy balance but it is not really important in the financial -- and the big financial picture of the russian economy. this is another way of looking 2 lighthere those top blue and dark blue bars are the money that the russian budget earns from gas taxes as opposed to the big green bars, the money from oil. those people who keep saying and impacte must try gasfinancial aspects of
because this will punish the russian economy, they haven't got the picture remotely right will stop -- they haven't got the picture remotely right. let me rush on and just to show you the big picture of the take or pay contracts in europe. the reason this is really americans --that some of you i can see why recognize -- will remember an era before the 1980's where there were long-term take or pay contracts in this country, but that hasn't been the case for a long time. long-term take or pay contracts are alive and well in europe. line isrs, the top gray like the current situation. the contractual commitments, for
those of you not familiar -- if getdivide by 10, you one billion cubic feet a day. european mid-2020s, buyers are obligated to buy at least 10 billion cubic feet a day and close to the 15 billion a day from gazprom under international contracts with legally binding arbitration. all of this discussion about how can europe reduce its dependence on russian gas -- if you want to break these contracts, very conservatively it would need to spend between 400 billion euros and 600 billion euros to buy out his contract. that isn't going to happen. this is the picture you need to have in your mind when you think about russian gas exports to europe. but there is some difficult -- i am not going to go into it --
arithmetic people credit -- arithmetic people try to do on this percent of its gas supply. that really isn't very helpful even on an individual country basis, let alone a european basis. one thing that you probably need to keep in mind is that traditionally, virtually all of russia's gas supplies flowed through the ukraine, hence the problems that we are having at the moment. that is all diversified and it has been specifically diversified because of the lack of trust that the russians have , not just since last year, generally 2009, but the whole of the post-soviet era due to nonpayment and the russians construe as that of cap
-- as theft of gas. this is obviously disputed, but withis been the problem supplies flowing through ukraine. as result of a lack of control, they progressively build transit diversification pipelines, which the first you see here. up and 2 pipelines now running. fact we havehe credited of -- quite a bit of cubic feet a day, they are not running at that rate. that is principally due to some complex regulations in the eu, which means that there has been ofonstraint on the amounts pipeline capacity that castro has been allowed to use.
that might it -- that gazprom has been allowed to use. that might've been resolved, but due to the recent ukrainian events and the response in brussels, it has not been resolved. the new south stream pipeline two making landfall in bulgaria. again, we will talk a little bit more about this in detail if people are interested. there are very severe revelatory problems with regulation in europe impaired with the fact --t the new regulation compared with the fact that the immigration in europe has not been written. it is hard to comply with regulation if you don't know if it has been written. the cast from model with how this going to work conflicts with even the main principles of the european regulation. this is very important because the really big problems in
january 2009 -- and if we have a crisis in the next few weeks and months -- have all been and will be in southeastern europe. in other words, this line delivered to countries like puerto rico, romania, serbia, and the former yugoslav republics, which experienced a really huge problems in january , and that is why this is an important pipeline for one aspect of european cap security, as i'm sure you will appreciate. it is considered a threat in relation to other aspects of european gas and energy security. that is a brief snapshot of the european part of this book and the relations -- the events of the moment. what i am going to do is pass on to jim henderson, will talk about other aspects of the book.
>> ok, thank you, jonathan. one of the obviously interesting questions -- the biggest questions that we try and ask in the book is what is going to happen to gazprom, because gazprom is by far the largest producer and reserve holder in , thea in terms of gas largest exporter into europe and the former soviet union, and the largest seller of gas in the domestic market. the reason for the matrix , "howt and for the title markets are driving change," is what we have observed since jonathan wrote his book in 2005, particularly post-the economic crisis in 2008-9, to put it bluntly, it gazprom's has been 's gas has becomeprom
the least desirable option in the market. how has gazprom responded to this change in its outlook and the need to find customers for gas? the best way to expand publishing of events came about and the shift from 2005 to 2008 is the combination of factors, the first of which was the stagnation of commands -- demands in europe, the economic crisis, and as the european government started to shift towards renewables. the second was the unconventional gas revolution in beings., which led to lng available, diverted to the european market, and to an extent, cheap coal. the third was the rise in the oil price, which meant that gazprom's or read related -- oil related gas price in europe suddenly became expensive. all that was happening and lead
to a reduction in demand for russian gas, at a time when on the supply side, rather unfortunately for gazprom, they made a fundamental decision around 2006 that they were going indevelop a huge new region northern siberia because there had been a concern throughout the economic crisis that russia might not have enough gas to supply what of the time is growing demand in all of its markets, 2005, 2006. the combination of events -- the stagnation of the man, the high price of russian gas, and the massive development of a new source of gas supply, led to, if you like, a perfect storm for gazprom, which is somewhat reflected in this graph. what we try to address in the book is how gazprom eventually has started to address the issue of its gas being the least desirable option and is now starting to develop strategies
to solve that problem. graph, published in 2013 -- i apologize, it is slightly out of focus, so i will point you at the colors -- the dark blue -- sorry, the big soviet legacy fields that have been in decline for some time, you can see going forward are in very sharp decline -- this is why the question was raised about the the him allof fields, the light blue. 's outlook forom its west facing fields, blue field, is essentially that the production was not going to rise for the next 20 years as it faces this new demand outlook. his contrast -- this contrasts very sharply with the ellicott had only a year earlier in 2012, reflected in the case -- the
blue line. it essentially downgraded its production forecast by the best part of 100 billion cubic meters per year. growthd been a trajectory has turned into a very flat trajectory. ,evertheless, as you can see the light blue expands dramatically. gazprom is committed to developing gas and a more expensive region of russia, very remote region of russia, and is becoming increasingly dependent on higher cost gas, and is also excess ofof it, an it, because it is committed to the development of fields like medicine 250 billion, 300 billion cubic meters per annum. it is forced to cut back its production expectations. essentially what we have in russia is a gas bubble, a theoretical oversupply of gas. there's a lot of gas to be produced by gazprom and bind
non-gazprom producers, the independents, as they are called. we have a competitive market developing in russia and described in the export market for russian gas. the other thing to point out is that all the growth, you can see, is going to come from the e east. last week gazprom signed its export agreement, which we can discuss in greater detail later. the themes here are, essentially, gazprom in the west is putting significant markets,on in all its has a pretty much flat production outlook, and a lot of gas to produce but not enough markets to sell it in, and all of its growth is going to come in the east. how are we doing? this talks to the kind of theme
of the shift from the core west siberian areas, the traditional fields, after the northwest, the massive new pipeline system that has been put in from the as a supplements, which are now being pushed further out. top, thelso see in the project which i will talk about in a little while as well. essentially, this shift away from the core areas to the more expensive developments in the russian context. is tiedlly, gazprom into this new source of higher cost gas. in contrast with the gazprom story, the of the key theme in the russian gas supply store has been the emergence of non-gazprom producers, independent producers, as they
.re called in russia russia's national oil companies moving much more into task. this the most is the theoretical growth of production from the independent sector, and essentially, it could more than double by 2020. in reality, what will happen s that havecontract already been signed with contractors in russia, is that domestic independent production will reach between hundred -- between 250 and 300 billion cubic meters. you see this shift away from produceso non-gazprom because they have been forced to sell at regular prices, which have been rising fast, and they have been undercut domestically by the independent sector. a fundamental shift which could see gazprom's market share in
russia fell below 50% easily by 2020. on the further element of competition that has emerged within russia is now in the inort market, where particular they are now allowed for the first time ever to sell gas to customers outside russia in the form of lng, and are preparing to do just that. essentially, gazprom's position came under threat from domestic years as well as international peers. as well as peers international peers. essentially, there's a lot of russian gas looking for a market. what i have done here and the graph on your left is just a -gn what was -- just as i' has to say -- the company
potential to vastly of 600 billion cubic meters a year. i showed historically, independent production in 2012, 200 billion cubic meters in 2020. this is a huge potential surplus . theoretical, obviously, but a lot of gas available. within that position in russia, gas from is the high-cost producer and is becoming the swing producer, if you like, of russian gas. it puts it in a difficult position but a position of some strength as well. although in russian terms it is relatively high cost gas, in global terms of gas is relatively competitive both in the western markets and in asia.
in terms of just moving to the asia and competition, this just plants,u russia's lng just highlights the fact that although gazprom itself controls production, lng rose nafta has a competing project and the same island, which it plans to bring on stream with exxon by 2019. most relevantly and immediately, the project that is planned to sell gas both into asia but also, interestingly, into europe. we're seeing the first elements incompetition for gazprom its core european market as well as in the new asian market. i think that that competitive threat, as much as anything else, may have catalyzed gazprom
this year.its deal in terms of the asian duo we can talk more about the exact details, but obviously i'm a the foundation of russia's eastern gas strategy will now but the infrastructure that will be built from the regions on the left via the three point 5000 kilometer pipeline that will run to -- how do we do this -- the border here and onto the vladivostok plant here. these 2 pipelines will become
the foundation for the development of the eastern strategy i could see russia producing and selling domestic and export markets, 100 billion cubic meters a year within a decade or so. this is a shift in russia's export strategy, hugely important in terms of policy and -- domesticopment, development, and it writes --provides gazprom an opportunity to reestablish itself as the dominant force. while we are talking about central asia, we talk in the book about the shift, if you like come in russian strategy in central asia from being the dominant buyer of gas from turkmenistan, whose pakistan, kistan,akhstan, -- uzbe and kazakhstan, to now taking a subordinate role in china, which
takes increasing quantities of gas from turkmenistan and is set eventually to import gas from has extent, and we have seen essentially russia and guest from except a loss of geopolitical leverage in the region of the commercial of these diversification strategies, meaning that they're sending much more of their gas east and north. just to conclude, given our half at the andhis graph is intended to show that we are -- although some of the issues we address him about our problems for gazprom -- as
markets have changed and driven a changing strategy, particularly at gazprom, russia is in a competitive position relative to the 2 major importing regions, europe and asia. we believe that despite gazprom, and the domestic context, is high cost them in the european contact it is competitive. the breakevenhat isce of the german border competitive with anything we can see that could arrive to compete with that. the new pipeline that could be
built, new reserves that have , will allowed russian gas to be competitive with central asian imports and lngre lng and current imports into china. markets in which the gas has evolved, the country finds itself in a competitive position , geographically ideal positions , and going forward, if gazprom can continue to adapt its marketing strategy, he could find itself in a strong position relative to competitors over the next decade. be happy to take lots of questions.
points for discussion, and i thank you very much for commendable piece of work that you have done. if i may use the power of the chair, because our principal commentators are going to be ed -- the question that would emerge in my mind is if the chinese deal indeed comes to fruition and the addition of russian gas moving into the far s, do youower market
have any views on what that means for competitive lng sources? i'm thinking particularly does this make it more difficult for canadian lng to comment to the market and the gulf coast lng from the united states, and are we kidding ourselves with all in thepla about lng united states that it may be somewhat subdued from the more optimistic forecasts? ,> i think the context is that assuming the deal goes ahead, as you say, and gazprom proficiently develops the infrastructure that is required, we are taught about 38, 40 bcm of gas in the market that needs to be supplied with 400 billion cubic meters of gas-plus in 2020. i think there is plenty of room for alternative sources of
supply, and the chinese have clearly developed a compass of supply, and we have western supply from central asia, sovereign supply from emr, the supply on these and similar from lng -- supply on the eastern seaboard from lng, and it is being expanded dramatically on the eastern seaboard. the veryeal provided logical northern access to that supply. honestly, there is indigenous obviously, there is indigenous financial supply from conventional and unconventional sources. though, iss do, start again to set a benchmark price for potential imports into china. chinese have started to send domestic benchmark down in the southeast in the country. this deal looks like it is
linked to oil products as well. it would deliver gas into the to $13,coast around 12 which is the kind of price that would be delivered. we are starting to get a benchmark price which perhaps does make it more difficult or forces the higher cost lng, prudential -- potential lng producers, to assess how competitive they would be in the chinese market. i think we are converging on a sort of price expectation now, which is lower than we have seen in the past couple of years at least. >> ok. ed? >> thank you, charlie, and thank jim and jonathan for putting this book together, which will be a real contribution to the field. it is always good to bring reality-based analysis to
washington. [laughter] washingtonar substitute reception for reality in policymaking -- substitute perception for reality in policymaking. i don't know about europe. but it is always good to have prophets from overseas, washington because sometimes the prophet is not respected in his own country. --ink one, don't i think one comment on the importance of gas and russia's that it is utterly true that oil in russia,t money but gas is often about politics, both domestic as well as foreign policy. sometimes arsenal politics. -- sometimes personal politics as well. pruden'see that in mr. personal involvement in ukraine and the china deal that was just
announced. mr. putin would rattle off gazprom's statistics at the drop of a hat anytime someone gave him the opportunity to. i want to raise, which may be a subtext of the book i promise to read more carefully as time allows, is whether in order to meet the various market challenges that both of you of outlined, whether fundamental structural reform of the gas sector is necessary in russia or not. the role that independents play, for example. it amuses me that they are called independents. it is like calling exxon mobil and conoco phillips independents. they hope to be independent from gazprom but they are not independent from the classical oil and gas patch.
are they going to be limited, ,hese so-called independents to serving the domestic market clearly expanded their scope there? are they one offs, or do they pretend at something that is larger in the future that will be a real realization of the gas market in russia? it as ad easily explain special relationships rather than the systemic change that is over the horizon. it will be interesting for you to see more about that. word to become
more responsive to the changing global gas market, which you mentioned, it seems to me that some changes will be necessary. unbundling, which is kind of a four letter word for gas from -- four gazprom, would allow better access to pipeline capacity by more producers than just the privilege to full -- than just .he privileged few think of the gas over russia as a result of the structural ,igidity of the current system given that supply is not the structural market reform, necessarily, to achieve the kinds of efficiencies that russia and one half. on ukraine, it seems to me that not only is ukraine currently relied upon for at least half of gas from's exports, but there is
also the question of whether the availability of transit through ukraine allows gazprom to compete in the spot market that these expensive new infrastructure projects do not afford. these are extensive projects that need to be financed, they required the kinds of long-term obligations on the part of the buyer in order to his projects to be financed. ,hat is the option of ukraine even in the medium to long-term, give gazprom the kind of flexibility to price their gas wayeet the spot market the it is rather than be stuck with these long-term take or pay s.ntract
i would be really interested to hear you talk a little bit more china. assessment in a lot of things are not known. some of the russian pronouncements have not been confirmed by the chinese side. which i find adjusting -- which i find interesting. there is almost certainly going to be some prepayment or loans required for the $55 billion that gazprom estimates it will cost them in terms of capital spending on their side. we don't have a lot of commercial -- details on the commercial terms. interesting in the slide that jim showed, gazprom forecast for 2020 production from eastern siberia, it was very modest. maybe this deal will cause them to revise their forecasts.
wheneal is this deal, and and how might we be able to tell? one other point that we would be nterested, particularly for europeans coming to washington, for us to hear more about is the eu's competition case against gazprom, anti-competitive practices, allegedly. be -- a report should be filed not too long from now, maybe by fall. picturer part of the that you can help us fill out, maybe, is how interested is russia in the gas exporting countries forum? is this just something that will lead to anything or something that in the longer run may have more legs than we seem to expect
right now? i happened to be in turkmenistan last week when the deputy prime minister decided to make a refueling stop, i think, between shanghai and st. petersburg. forum ismeeting of the in november, i believe in go hall. a little bit about that will be interesting for the audience as well. >> you raised a lot of questions that you 4 gentlemen can address. some of my questions would probably be the same as ed chow 's, and i won't repeat them. i want to say how happy i am to have a chance to not only read the book, but get a free copy, which a lot of people in the audience are amazingly appreciative of. you don't typically do that in washington but i won't reveal that secret.
it is an amazing book and will be the go to reference book for anybody who works in russia and energy issues. it does not have to be narrowly focused on gazprom or russian gas or acetyl. i speak of the consumer. there was no way i can envision knowing at least a fraction of what is in that book but i have the book and i can go through it . i think it is going to be a wonderful asset for all of us. i wanted to also include -- just has made itnt -- ed to some extent. despite the title of book talking about markets and supply and demand, competitive markets to which then russia has to react, the book is more than just about the complexities of markets. it is also about the terms keeps -- the
coming back in the book, trying to resolve tensions between different interests. this is not just between supply and demand. this is between largely the thetical imperatives, political demands that are placed on the russian gas sector and gas from, and in particular to resolve that in tension with commercial demands. as the book points out, there are 3 demands being placed on gazprom, and it makes no sense to look exclusively at gazprom as a commercial entity and say that it is not living up to the expectations of profit potential without taking into consideration that this is more than a profit maximizing commercial entity. it is subject to that which generates revenue, generates revenue for the budget, and has the authors point out, a small percentage of russia's formal tax revenues -- i will get to that in a second. it also has the geopolitical
, the geopolitical role of russian gas, but also doing it in a sensible and realistic and balanced way, pointing out -- debunking the idea that gas is a ispon, pointing out that it another, a point of pressure, and if you use it, you will probably destroy your ability to use it in the future. there is a lot of complexity there as well. finally, the role of gazprom in russia's domestic situation, which is economic and political and in russia today those are pretty much the same thing. it boils down to gazprom's role in keeping an economy a life that is not always viable completely on its own. it produces jobs and ancillary sectors, input produces, a huge part of the former russian defense industry, soviet defense industry, is kept alive and was especially cap alike during the 1990's by orders from gas from
-- orders from gazprom for equipment, cables to pipes to anything else you can imagine, engine manufacturers, being prime produces of pumps for gazprom and so forth. it is a hugely important role and is expected to play that role perhaps more than anything else. may onlyly --gazprom account -- or the gas sector may only account for 5% of russia's tax revenues, but that is formal tax revenues, and if we are able to view the informal taxes, the informal burdens, social, economic, and political, that gazprom has to play, it does play a very important role. there is that complexity, and that -- and away, the complexities, the trade-offs in the tensions is the overall theme of the book. it is a twofold message, because on the one hand, the authors are
identifying the huge nature of these complexities, the challenges, both in the market sense, supply and demand equation, competitive markets, but also in this other thatmmercial complexity gazprom faces. bigger maybe that people ordinarily imagine. they will only grow larger. at the same time, there is a positive message, which is what jim ended the conversation on, about real signs that gazprom and russia more generally, or the manager of the big russian -- vladimir pigeon -- is able to see answer to adapt. maybe belatedly, who knows? i have heard him personally talk -poohing shale gas and
playing down this and that and you tend in the beginning to take that seriously, but later you wonder, is that just a smokescreen? we won't really know what he is thinking. especially after approving this but, is that there is real capability for change in russia. it won't necessarily be the kind of change people are imagining with the perfect market-oriented structural reform of gazprom and so forth. but they will adapt to the changing environment that gazprom is in. two and on this very personal role, he doess regard himself as the head of the whole of the energy sector. but he is a man who hedges his bets. he has fallback options. he avoids under all circumstances making a commitment that he can't send out 10 out of. with that sort of mentality, given the challenges that have
been described in the book year, we don't know exactly what sort of changes he might undertake, and they could spend almost anything with respect to the domestic organization of industry, as well as foreign markets. but we have to keep your eyes open, because the gas sector, russia's energy-based economy, is much more resilient than many people seem to realize or seem to indicate when they suddenly extrapolate forward from certain assumptions about past behavior. to me, that is the story of this book, indicating what the challenges are, what the trade-offs intentions are. and giving indications of how already certain changes and adaptations have begun to be made. >> thank you both, gentlemen. >> why don't i pick up some of the more specific points? i will leave jim to talk about china and independents, because
that is very much his thing. can i start by picking up the point that cliff just made about the role of gazprom? what we try to explain in the book is that gazprom, if you look at energy business models, is caught between the business model of a traditional utility company in a producing country, where these companies are expected to provide energy for s -- that islow cost what they do almost everywhere in traditional producing countries. one of the things that is interesting about the point that madeade about reform -- ed about reform is that the russians have done pretty well in relation to their peers for reforming the gas sector in relation to pricing, and also in relation to liberalization. i don't want to make two big deal of this, but if you take a look at some of the efforts in the european -- eu countries and reform-- in reference to
and liberalization, you see that the russians have a lot to go. but in comparison to where they were 10 years ago, and where in my previous book i predicted they would be, they have done pretty well. virtually every cubic meter of gas which is sold today in .ussia is sold at a profit maybe not at a profit. , andis a big thing to say in our book we publish about gas pricing around the world, what subsidy, just subsidies, subsidy, unsustainable subsidy. certainly,s not -- the third-party regime is not perfect. and it issts relatively complex, and unbu ndlign is not going to happen anytime soon, but it is talked about.
just capture if you -- capture few ukrainian, european things. as far as the availability of ukraine transit and what that forward, i see this as a typical russian chess game. they have their pieces on the board in different pipelines and if necessary they can move their pieces around the board amid depending on what the commercial situation looks like, depending political situation looks like. they, i believe, would be very happy for some kind of resolution of the ukrainian situation, which would create a nonhostile relationship between the 2 countries. whether they will succeed in that, given the crimean act, i wouldn't want to venture an opinion. but normalization of relations with the new regime in kiev is a
priority. is it achievable, given the kind of guy putin is? big question. -- yes, against gazprom we are closing in on what will need to be a statement of objections. this is what you guys call antitrust. the key problem here is that the competition authorities are objecting to the continuation of boiling the oil pricing and particularly the central east european and baltic countries. gazprom is resisting this for all kinds of historical reasons. if they don't settle with the authorities -- if the authorities see a statement of objections -- this was an eu company, there would be no appeal. gazprom will appeal to the european court of justice. we could well see this stretch on for the next few years, but in the fact of terms -- but in
de facto terms, this will be settled. by the time this is finally resolved, and contractual terms it would be settled. i would be surprised if the european court of justice decides to try to levy a big violationsstorical which the russians, anyway, wouldn't pay. how interested is russia in the gcs? very, very interested in advertising, but not interested in reality. he was in moscow last year or the year before, they made a big splash about it. putin did a major speech about it in which didn't represent anybody else's policy apart from his own. but the key thing really is only 3 countries are really high profile.
the russians -- i guess the uranian sindhi ontarians. the problem is -- the uranian's -- iranians and the algerians. the problem is none of them can agree on anything. this is something that journalists get very excited about, but not many other people. ok, just talk about thependents and deregulation of the russian market, and just to pick up a point that both of you made about balance, it is really adjusting a thing about why -- really interesting to think about why the independents have seen such a dramatic increase in their market share and production. it comes down to the problem that gazprom has in terms of balancing its political objectives set by the kremlin and its commercial objectives to -- and an upright
operate as a commercial entity and try to make some profit to keep itself going. i think that what we saw around post crisis was, as the market is changed and gazprom fail to adapt, there was a risk, i think, that its commercial inadequacies were starting to lead to a situation where it could not fulfill its political objectives, or at least the kremlin perceived that there was a possibility that gazprom would be losing its dominant role and a tool ofy to be foreign policy. pressure was being applied by -- from various angles, and this is not just about this issue. it is about vested interests as , because the owner of nova tech is linked to mr. putin. there is a sense that gazprom
commercially was failing and that potentially it was in a downward cycle, and the elements of competition and also elements of encouraging russia to start to develop its most competitive gas and get it into the marketplace, was a driver. you saw that in the domestic market because gas from --gazprom's expensive new fields needed a higher domestic price to underpin the economics. we saw the regulated price at customersrom charges increasing 15% per annum. at some point, independent producers found that they had russia's keeper gas and could undercut gazprom, from 2012 'sward, really, when gazprom five-year contract started to expire, they were allowed and even encouraged to compete with gazprom to start a settlement is
a quasi-market price. there is still a regulated price, but essentially now the independents and even gazprom will this is because gazprom's higher regulated price was undermining the economic growth of russia in the post-crisis time. seeing that we are complaining about high energy prices. once this regulatory process developed that would allow competition, but that doesn't mean we are heading toward a liberalized market will stop that means there was an incentive to encourage some competition and i think what we're seeing now is very much an oligopoly. there are three big gas companies in russia and we saw the development in the domestic
market. now we are starting to see in the export market and gas prom andzprom market share inability to do a deal with china was mother. what we have seen is the lng export monopoly broken in a very controlled manner. the legislative -- legislation is very specific. if you are a company with lng in your license, then you can develop it. nonetheless, it was a catalyst for action, if you like. act together. it's interesting that nova tech side of the deal and sold it before gazprom signed a deal.
i think what we are seeing the balance between the commercial, political, and vested interests, and it will be a very controlled process. step could be third-party access to the export pipeline in the east. it could go to china or could be sold into the domestic market. next potential step toward a controlled liberalization of exports. there is no mention yet of the pipelines facing west being liberalized in this session, but you can see the step-by-step the three which companies try to find a balance in the east and the west. i think the liberalization process is a slow one.
it will be many years before we up but we aregan taking steps along the slow journey. in terms of the reality of the it's difficult to be concrete about it, but all i say is from a commercial perspective, we believe in the last three or four years, we believe somewhere between 350 rice400 is about the right for both parties. can make a gazprom reasonable rate of concern assuming it invests efficiently in the entire eastern program.
it appears to be a balanced commercial contract with lots of bells and whistles, but it would seem to make sense or us or both parties to make the deal forward will stop maybe there will be political shenanigans, but commercially it looks sensible. i would not be surprised if a got seized on roughly the terms we have known. >> thank you very much. it's time to open things to the floor. please keep your questions a question and not a link the statement will stop you can address it to a member of the panel but if anyone else wants to weigh in, we will proceed that way. >> i wanted to go back to this idea of the perspective bubble and throw out a few possible reconciliations and i want to get your reaction.
what is you refine where you sell gas to europe. the second option is try to build a western group to china which would bring it from west siberia, you try to lower the price within russia and for more gas in the russian economy, or you just leave it on the ground for a better day. when you think about those four possible options, how would you think about the relative attraction of that? >> the realpolitik is leaving it in the ground is what is happening now. even if you don't believe they could reduce 316 last year when they produce 487, they have a lot of shed and gas. interesting is most
is we as an institute have conducted a public debate with gazprom on pricing. what's interesting is they are still saying the same thing .bout the pricing after a lot of hard talking with their customers, they have adapted where they need to adapt in the competitive market. competitive are now although the way they have done bizarre --credibly it's a crazy way of doing it, but i have done it stop the question going forward is do they want to put more gas into europe? the we describe as discriminating monopoly thesis. they all do it.
how do i continue to compete without crashing the price? every so often, they make a mistake and crash the price or they starve the market and the price goes up dramatically. this threat hanging over , prices in europe are falling and have fallen around 25% since the beginning of the year. everyone is telling that gas is in big trouble in europe. demand is falling and falling faster than domestic reduction. if you want to sell your gas in europe, you got to compete. finally figured this out in 2013 and massively increased its sales. concept, a complicated but the practice is complicated.
>> the interesting thing about that it'sgas is competitive. it's not a premium anymore. if you do the math, it should have been cheaper. the russians are quietly confident that europe will not find alternatives and they have .penly stated there's no doubt they could undercut u.s. lng in europe. if they want to, they can undercut the competition. there's no point in them crashing the price now. you are always better maximizing price. in terms of what do you do at the over supply there's a price in the domestic market where they were losing money. the price in the domestic market
now is give or take the , so we'veprice reached a level where gas prom openere gazprom can break even the most expensive fields of the more gas into the market, but there's no need. customers and producers seem to have found a level at which everyone is happy. but itce is not going up looks like we have reached equilibrium. in terms of extending a western pipe to china, they would love to do that. but the chinese are not falling for that. they are trying to play off the border with central asia from fields where they have equity and significant political and commercial control.
's best hope is to sell more gas in the east using the existing infrastructure. it something miller has claim they are now talking about but 2020 orhere out eight 2030 before we see gas coming from west siberia. where thetern rail is lack of chinese comment is conspicuous even though the russians keep talking about that's the route to get it up to 68. drawing gas from a pool in western siberia is exactly what the chinese don't want. i think it's very significant that besides the determination which was a break their last which raises the suspicion
in my mind as to recovering that maybe see mpc will try to claw up scream -- upstream eventually. chinese supply would come from if and when gazprom develops the field with their usual efficiency that there may be an opening down the road for chinese to at least ring up the question of equity in those two giant fields. >> we've got two questions here. tim and ariel. >> my name is tim and i'm with brookings.
answer ininted at the the previous response, but i would like to learn more about europe's desire to diversify supplies. it's not new but has been revitalized in light of ukrainian events. with theen correctly background knowledge we have on the competitiveness of fuel sources in europe, it seems there will be an increasing share of call etiquette and there will be an increasing supply of russian gas. what does it tell us about europe's desire to diversify its and how does that affect it in your view? >> we are some of the few he pulled working on the subject.
99% of people in european universities are working on renewables, climate and other sustainable issues. that this is a horrible generalization but it's a reasonable one. member states in northwest europe and everyone under 35, this is the only subject matters and energy. do we care about this for? the planet is at risk. this old-style hydrocarbon stuff. this is the problem with the promotion of cold. still the environmental community have not understood this is what's happening. energygestion of an union is a manifesto partly for coal and to treat it.
this is something the new commission as it picks up in the fall. i don't know how it's going to work out but what i do know is i to finddently expecting this outside of germany where nobody could be against it. the question of alternatives to russian gas -- it's a terribly politically incorrect things to say but there are no alternatives. conventional gas production is falling. if you don't know probably in the whole of earth, no more than 100 wells have drilled anywhere endlessly where they have been drilled they have an unsuccessful and there have been massive resistance. my country, you drill a well, just drill a well at the evening news. punch up massive
between environmental protesters and police. the big gas prices in europe no one can talk about because it's so serious is in north africa, egypt -- we need to speak about libya. we have no idea whether gas will be arriving in italy from one day to the next. the algerians have not issued any data since 2012. get too serious, no one can talk about it. the politics are very complicated. many studies have been done. many consultants have gotten rich doing these studies but there's nothing much new to say that we haven't known for quite a long time.
>> there's a very simple analogy. if europe wants to diversify , then it russian gas just has to look at the japanese example and say fine, you can do that. want to do that, go ahead. you want gas at 10, come back and see us. why the russians are keeping very quiet about the whole thing and just letting it play out. the interesting dilemma for the european union is played out in the whole situation where the russians are offering to bypass the ukraine, to rid europe of one source of a lack of supply and are being blocked from doing that for short-term fiscal reasons. we will see how that plays out but of course that does not diversify europe in any sense
from russian gas. ariel? >> good morning. excellent resignation. cost of production -- if you or ift eastern siberia you look in the arctic, the cost of production is very high. this is what land gets as opposed to offshore. offshore mozambique is shallow, that signing new licenses as we speak, don't you think this will go to europe as well? the picture in the early 20 20's will be quite different than what we see today where russian
gas from west siberia has an advantage. the second question is about ukraine. do you think ukraine has viable options in terms of enter connectors from europe, gas coming from lng or otherwise or even lng into the black sea with the floating of terminals? the overall cost are high. think russia is pretty gas delivered to europe can be delivered at and canight dollars btu compete with any of the offshore sources. arctic has will be very expensive but i don't think it's in our lifetime.
>> you are a young man. [laughter] there's when the of gas on the peninsula to satisfy georgia is more difficult, there's the helium issue, but it's all about transportation. think russian gas upstream is competitive and the interesting thing in the east is we are fails tosee if gazprom deliver, we are going to see the same thing happen in the east as we have seen happen the west. gasindependents have gotten put in the pipeline.
one claiming they can produce 15 billion units per year from existing fields. , if we are disappointed as 's could well be in gazprom inefficient development, there are other people who can step up to play. it will be interesting to see what happens. reverse are complicated low options for ukraine which you would need a different presentation to outline. verythe russians would be clear about because they saw this happen in 2012 is this is all russian gas coming around and flowing backend. yes, you could do floating lng but it would cost a lot of
money. the real tragedy is this is a great country who has been run by people who have abused their positions in the post-soviet time. if this country could be run by people who would give the place a chance, they could produce gas. gas resources, conventional, unconventional him onshore, offshore, but the moment things seem to be going well, somebody in government decides to take a position in a psa they have given to a private company. if we could get to some someone's of the kabul government, that would be should bebecause this a rich country. it's got everything it needs to be a success.
>> thank you for a remarkable presentation. it is quite breathtaking. it is quite astounding what you are describing, which looks like the potential capacity of russia's well situated geostrategic position in terms of oil and natural gas. my question is this and i'm confused, really. index, there are two dimensions of climate change in copenhagen. a two second flip through, a second -- based second amount of discussion about environmental implications , local environmental impacts, etc., which we know is swamping the west.
in terms of offshore issues and all of the above -- i'm just wondering where, how and if that fits it both as a cost to mention and they geostrategic dimension given the acceleration and opposition to carbon fuels will stop it may be off topic, but the exxon center being constructed in st. petersburg today gotten corporate responsibility issues. >> let me try to address the reason why we haven't done much -- there is quite a bit of literature on that in this focuses on what are the comparative advantages in that area. is ais very interesting regular person discusses these gas and energy with russia, how little climate, the climate
features on their agenda. as aneel they can use it advantage over cold but that is about it. local environmental issues are and higher on the agenda there is at least some evidence of greater sensitivity to environmentalists when they develop new projects and if you take a look at the development and look at the photo album on site, you will see a lot of references to what they have done to counter the environmental problems that could have arisen. things that is wildly gaseurope is industry has really tried to play the climate card in its favor, it has almost totally failed, despite the fact that it's a very logical argument. it has almost totally failed.
gas in most parts of europe is not regarded as significantly beneficial fuel despite the fact that in reality it is. environmentalists tend to focus on methane emission issues which are unqualified -- unquantifiable. it's one of the reasons but not the only one there so fundamentally opposed to anything having to do with conventional gas. that's the start of the story. i think they risk underestimating the impact in europe. has made one presentation outlining the traditional view of gas as a supplementary fuel to substitute for intermittently and has made some effort to demonstrate the benefits of gas over coal.
gazprom feels anything it says is taken as a bad aiding in europe. they are talking their own book and it's a russian book as well. it's obvious what gas and coal can do and plays out as a natural environmental story. quite clear what is going on. >> kevin? >> thank you for a great presentation. and tore in washington, ask a political question. jonathanhe reason
outline that the european union has adopted any measures -- there has been a lot of draft theslation and talk here perspective on what the effect would be on u.s. sanctions notnst gazprom or technologyy, the restrictions. would that have any impact in what they are doing and what do you see as being the material unilateral sanctions ?gainst gazprom -- >> we have a political
crisis with the russians. let's not make it into an energy crisis. while i am completely supportive of the general view of the crimean annexation, i think we need to be really clear in europe that we have an enormous amount to lose from this relationship. if we are going to impose significant costs on ourselves, let's be clear why we are doing it. should there be, we all hope there isn't, any russian incursion into the eastern ukraine, that would come on quickly. if the status quo is maintained, my guess is there won't be any increase in sanctions and who will not go into the energy sector. one thing we should keep in mind is it's not a new situation.
before the u.s. does anything, we should look act a lot topened on those episodes see how successful they were at achieving their aims. >> the technology sanctions, and i wasare three big areas, with the finance director last week and there are two things that are of concern. one is thereby be liquefaction and if there was a specific targeting, that could hurt. financial sanctions and the threat of sanctions are making banks nervous about lending.
of course, what we are seeing in both instances just to complete it's the arctic offshore. then there is the unconventional, where we have the pilot projects from a number companies and that technology could hit. but the response on a number of -- they're looking to finance a lot of stuff with chinese banks. on a technology front, it's not quite as easy. of drilling the
unconventional side, you can -- 40% of russian rigs are coming from china. the offshore thing is the difficult one. i don't see how they can drill in the art take without the support of the technology they bring and that can have a significant impact. pr event, soive that would be an interesting one to follow. >> i think unfortunately, we are going to have to cut it off there. i want to thank jonathan and jim very much for joining us. please join me in thanking our guests. [applause]
session today, congress is not taking up any legislative work due to the memorial day district work time. the house will start tomorrow with work expected on 2015 federal spending and a debate on for the commerce, justice and science department. the senate is out. lawmakers will return on june 2 and will debate sylvia burwell's nomination to replace caf au lait civilians as health and human services secretary. senate live on c-span two. more live programming coming up with remarks from donald trump this afternoon speaking at the national press club. you can see that live starting at 1:00 eastern. an event hosted by the american enterprise institute on our companion network, c-span3. over 30 five years, c-span brings public affairs of
its from washington directly to you, putting you in the room at congressional hearings, white residents, briefings and conferences and offering gavel-to-gavel coverage of the u.s. house all as a public service of private industry. industryy the cable tv and brought to you by your local cable and satellite provider. >> a discussion now on the second amendment with an author who claims it the most misunderstood amendment in the bill of rights from this morning's "washington journal." host: we're back with michael waldman. he is also the president of the center for justice. with where you begin in the book. what happened on april 18, 1977? how does that fit into the story
of the second amendment biography? guest: i'm guessing you might mean april 18, 1775. which is patriots' day. that is the day of lexington and concorde. that is the day the american revolution began and it began the role of the well-regulated militia and the citizen soldiers that are at the heart of the debate over the second amendment. british soldiers and regulars went into the countryside looking to capture arms and john hancock. and samuel adams. byy found that they were met the farmers and innkeepers and others in the town of lexington and the town of concorde who eventually repulsed them. this is the shot heard round the world. host: how was a militia defined back then? guest: in looking at this issue
of the second amendment, we all know the phrase in the text of it. a well regulated militia. it is striking when you go back periodk at the colonial and after that. how important these militias were. was every man, adult man and eventually every adult white man. a member for their entire adult life. they were in the military force, police force of the new states. these militia members were required to own a gun. they were required to have a military weapon and bring that weapon from home. when we understand the thinking of the folks then, going ownership was more of a duty that a right.
saw the militias -- once the constitution was written, the constitution brought a much stronger central government. of alowed the creation standing army, which was something that many americans were very afraid of. they thought that would be a pool of tyranny. -- tool of tyranny. many americans were worried it would crush the militias. something we to would not want to see. that great debate, that fear is what led to the second amendment. host: we showed our viewers the language of the second amendment. right of the people to keep and bear arms shall not be infringed. what do they mean it out a
well-regulated militia? mean: the phrase does not -- we think of it meaning something governmental. it meant well behaved or well run. note militias were individual vigilantes appeared they were woven into the fabric of colonial government and were based on citizen soldiers and the idea that everyone was required to own a gun. it's such a completely different world than what we live in now. army,were no police, no no cities. things were very different. it's hard to draw direct lessons or parallels from that counting time. host: after patriots' day, what happens next? what you write about in this book that the fines, contributes amendment and the
bill of rights? amst: during that war everybody paid oh my gosh to these militias. it was thehought democratic way to do things. they also did not work out so well. somebody like george washington was very skeptical. the other leaders of the revolution eventually realized this was not a way to build a continental war or a country. they did convene the constitutional convention. there was a lot of debate in those secret deliberations which we know about among other things from the notes of james madison. there was a lot of debate about the militias and the army and who would gain control. when he read the constitution, there is a very elaborate section that we skip over that talks about military force. saying that there would still be
militias, but the president could summon them into service and the federal government could set the rules for their officers and things like that. when the constitution was released, it was one of the great debates in american history and it was really fun to read about. moment whens this big issues of the role of government were debated and and people were afraid of the centralized authority. some people were afraid of representation or taxation. this issue of the army was one of the things that people were fighting about. to get the constitution moving to the states, starting in massachusetts and moving on to virginia and new york, the constitution was ratified with a
catch. people said, we need to have amendments. amendmentsozens of in, dealing with all kinds of issues, including the militia and the right to keep and bear arms and other things like that. mostly on other topics. the constitution got ratified. madeongressional race was a big difference. james madison who we revere as the father of the constitution -- he thought the congress should be able to veto the laws of the states. he was for a much stronger central government then. madison was against the movement. --thought the constitution he ran for congress in that first election. it was a tough race. the swing votes were baptists.
the religious minority. they said, we will vote for you if you support the bill of rights. madison did one of the great flip-flops. he vowed to pass amendments and went to congress and had to push amendments through the first congress and that is how we got the bill of rights. host: what was the debate like in congress over the second amendment and bill of rights? guest: one of the things that is striking to me was how heated the debates are today, it is so embraced and waved as a banner by those who oppose stronger gun regulations. it's very controversial. it was not discussed a whole
lot. it was not nearly as important in the minds of the framers as something like the religious freedom amendment. thedebate on the floor in house and congress was quite revealing about what they had in mind. yes, americans certainly had guns. on the frontier, people like two guns for all sorts of reasons. were gun laws. you cannot fire a gun in the city of boston. you had all kinds of rules about where gunpowder could be kept. d. laws were prevalent in terms of the amendment, james madison's original gives us a good clue. it was a version of something like a well-regulated militia being necessary to the security of a free state. religious issues
with bearing arms, you don't have to do your military service in person. it was quite clear about the militia -- there were 12 congressmen on the floor of the house to talk about and participated in that debate. the entirety of it was about the militias. it was assumed that they were talking about this objector status. not the only thing that was on their minds. it is telling as we try to understand what they were thinking. ispoint throughout the book that we can't find out what the second amendment means by traveling back in the time and tapping james madison on the shoulder and asking him. every generation interprets it, fights over it based on our notion of american values and our notion of the proper role of government and how to balance freedom and public good. we have been reinterpreting it
over and over ever since. for two sentries, the second amendment received little notice. understood its provisions. lawyers rarely raised it in court. guest: isn't that hard to believe? it's true. the supreme court never ruled that the second amendment recognizes an individual right to gun ownership for the purpose of anything other than militia service until 2008. it had ruled repeatedly otherwise in the previous two sentries. this was not something that people thought was all that relevant. it was rarely raised in court cases. guns and gunof laws and we fought about it in the legislatures and congress
and ballot box. but we did host: so when is it that this debate happened. ? guest: there is a really clear demarcation line there. in the cities in the early 20th century, there was a federal gun law in the 1930's upheld by the same court. by bonnie and clyde and other high profile bank robbers and hooligans over time. federal laws came into play. what happened was in the 1970's tom a there was a backlash to the liberalism in the 1960's. one of the places we saw that was at the national rifle association. the nra is a long-standing institution founded after the by officers of the
union army who are worried the union soldiers did not have good marksmanship. it was to train people. they did that and it became known as a sportsman's organization. testing the interests of hunters. it was not a crusade against gun laws. it and when asked if they thought the second amendment had been violated, they said they had not given that any thought. it1977, the nra indicated would move further from politics and move its headquarters to colorado. at its annual meeting in cincinnati, 1000 activists showed up and booted out the leadership of the organization thatacked new leadership
is much more intense and much more dogmatic and really converted the organization to a crusade on the issue of the second amendment. lobbyys, if you go to the of the nra headquarters in virginia, you walk in and see the second amendment and it texts on the wall. out the partdited about the well-regulated militia with the two little dots on the wall. the nra, we know now, is a few -- fierce and powerful organization. was focused on the second amendment but judges and scholars and the law and the courts still do not believe the focus and the purpose of the second amendment was about protecting individual gun ownership from gun laws.
gun ownership for self protection and things like that. textbook legal campaign over three decks it -- decades to change the constitution. we have seen this many times in american history. it changed again with scholarship, with people who believed the second amendment reflected an individual right to gun ownership looking back. i criticize some of that. some of it was valid but some of it i did not think was all that valid. it had a big impact. political system and public opinion. nowou look at polls, it is a widespread and extreme view. pastonly finally, over the
decade or 15 years, did they go to court. and go to the supreme court. by that point, it fell like an apple to a tree. it is not a very surprising conclusion. we are talking with waldman. .e want to get your thoughts -- has their own news channel, news radio station, news websites. on their company radio show last tuesday, the host had on its row graham nicholas johnson, professor of law, who has written a couple of books on this. he disagreed with your premise.
>> we start out without a bill of rights. the idea of the bill of rights was that we would just have a limited number that would not impact the basic federalist structure that was designed in 1787. 1787, congress gets authority over the militia. the second amendment does not change that. seen inhe cases we have the 20th century, where there is controversy about federal power over the militia, known was a even raising power. the other important point was the list of pre-existing, individual rights, the , to show whatever reason for the codification of the second amendment, that does the range of the
right. the best affirmation you get comes from the great liberal justice whose name sits on the that waldman is operating in. here is what he said. rights,ing the bill of they build a form of government decidedly different from the british heritage. they wrote the bill of rights not to create rights but to prohibit government from and theyg on rights confirmed the pre-existing residual in the ninth amendment. host: michael waldman, your response. he is basically right in what he is describing. the question is what they meant by the right to bear arms. in the, the right to be
militia, have your gun, was very essential. it was a check on federal power. some of the things like the the firstdment, like two amendments, which never got ratified, were checks on congressional power. militia system as that kind of check. it was an individual right tolected in the constitution be part of the duty to serve in the militia. it is hard for us to imagine get the framers would even the questions we are asking them assaultr for us about weapons in people's private hands, and background checks, and all the other things we are debating these days. if you go and look at the debates in congress or the constitutional convention or even the ratification
conventions for the constitution, they certainly felt people had pre-existing rights. were talking, they about something more defined and narrow about that. certainly that right as applied to the public service. thinkl point is i do not theught to try to answer challenges of today by imagining we can simply and only rely on the original intent of the framers in 1791. but it is very important, the country has evolved and the way we look at the constitution has evolved. how we look at the second amendment has evolved over time. it is a much more individually focused right now to us than it was in the foot -- with the framers in their era.
it is a much more individually focused country. laws and haveun had them for two centuries. professor's colleagues, a historian of american gun laws, he makes the point this was not only the state government's responsibility. it is not quite the same as the national guard today. the rightivic right, to participate, above all else, in the military protection of the country. class we will get calls here. don is in michigan. >> good morning. on the right to bear arms, in illinois, hehts in cannot carry a firearm. did theypreme court,
pass a law stating that was an illegal law? do you have the right to bear arms? >> question. --guest: good question. we have different hits in the country and they have different gun laws or at some arbors -- more restrictive than others. chicago, illinois, has among the strictest. the u.s. supreme court ruled the second amendment conferred individual right to own a handgun in your home to protect yourself and your family. if that was only applied to congress, the federal law area two years later, there was a case that was actually from chicago. in the mcdonald's case, the supreme court followed up pretty naturally from what they had
done in the heller case and said, this also applies to the state, so the constitution, whatever else it means, means you have a right to own a handgun in your home. . to protect yourself and your family very that was the mcdonald's case. what happened was ever since the two cases the mothers of in court said, look, it is a right but not unlimited. like all rights in the bill of rights and all right in the constitution, there are limits. limits dealing with the public good. we have to decide what those limits are. what are they? they were did not say. dozens of court cases all over the country since then have ofstled with the question what this new doctrine means. it has basically been a very interesting answer.
almost all the existing gun laws of united dates were upheld. democratic and republican judges upheld the law, saying yes, there is an individual right. this law protects the public and is important enough that it overrides that right ear and basically, a federal judge struck down the gun laws of illinois. they relate -- as they relate to carrying a gun outside the home. a federal judge said you cannot eliminate it altogether there you need to make it hostile for people to carry guns outside the home. that question and the legislature passed a new law to respond to the judge's ruling so when you go to chicago, one of the ink is you walk in and there are decals on the windows and establishments saying you cannot
ring the gun here and that was to protect the property rights of the store owner to control whether people brought guns in. the question of whether the second amendment extends outside the home and whether you can carry a gun around thomas that is the hot question right now legally. we do not entirely know the answer. overwhelmingly, the court has upheld that. a court in california has held otherwise. republican caller. good morning, robert. go ahead with your question or comment. caller: good morning. to, i would like for you talk a little about the prelude to the constitution. >> now to live coverage of the u.s. house as members are meeting in a brief pro forma session today, meaning no
legislative as this will be conducted. now live coverage of the u.s. house here on c-span. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]